Obligations of Listed Entity which has listed its specified Securities
S.No.
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Particulars
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Regulation
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Details
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1.
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Composition of Board of Directors
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Regulation 17(1)
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1. At least one woman director;
2. At least 50% of the Board shall comprise of non-executive directors
· Where the chairman is a non-executive director, then at least 1/3rd of the board shall have independent director
· Where there is no regular non-executive chairman, then at least half of the board shall have independent director.
However where the non-executive chairman is a promoter or related to promoter, then at least half of the board shall have independent directors.
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2.
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Review of Compliance Reports
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Regulation 17(3)
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The Board of Directors shall periodically review the compliance reports pertaining to all laws applicable to the company.
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3.
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Code of Conduct for Board and Senior Management
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Regulation 17(5)
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The board shall lay down a code of conduct for all the members of the Board and the senior management, and must incorporate the duties of independent directors as per Companies Act, 2013
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4.
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Compliance Certificate
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Regulation 17(8)
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The CEO & CFO shall provide a compliance certificate to the Board as specified in Part B of Schedule II.
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5.
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Constitution of Audit Committee
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Regulation (18)
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There shall be minimum 3 directors, with 2/3rd to be independent directors.
All the members to be financially literate and at least one member shall have accounting or financial management related expertise.
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6.
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Corporate Governance Requirement for Subsidiary
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Regulation 24
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1. At least one independent director on the board of listed entity shall be a director on the board of unlisted material subsidiary incorporated in India.
2. The audit committee of listed entity shall review the financial statements of the unlisted subsidiary.
3. The minutes of the meeting of board of unlisted subsidiary shall be placed at the meeting of board of listed entity.
4. The management of unlisted subsidiary shall periodically inform the board of listed entity regarding the transactions or arrangements entered into by the subsidiary.
5. Disposal of shares by the unlisted company resulting in reduction of shareholding to more than 50 % shall be approved by passing a special resolution, except in case where the same has been approved by the court / tribunal.
6. Selling / disposing of assets of more than 20% of the assets of the material subsidiary shall be duly approved by passing a special resolution, except in case where the same has been approved by the court / tribunal.
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7.
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Obligations of Independent Directors
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Regulation 25
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· A person not to act as independent director in more than 7 listed companies.
· In case independent director is a WTD in any listed company, he shall serve as a independent director in not more than 3 listed companies.
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8.
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Obligation of Directors and Senior Management
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Regulation 26
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A director shall not be a member in more than 10 committees or act as a chairperson in more than 5 committees.
Private companies, foreign companies and Nidhi companies shall be excluded while determining the limit.
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9.
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Quarterly Compliance Report on Corporate Governance
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Regulation 27(2)
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It shall be submitted in 15 days from end of the quarter.
It shall be signed by the Compliance Officer or the CEO of the Company.
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10.
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Prior Intimation to Stock Exchange
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Regulation 29
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a) The listed entity shall give at least 5 days advance intimation (excluding date of notice and date of meeting) to the stock exchange with regard to the financial results; quarterly, half yearly or annually, as the case may be.
b) The listed entity shall give at least 2 days advance intimation (excluding date of notice and date of meeting) to the stock exchange with regard to –
1)Proposal of buy back of securities; 2)Proposal of voluntary de-listing from stock exchange; 3)Fund raised by public offer, right issue, ADR, GDR, FCCB, QIP, debt issue, preferential issue, and others
c) The listed entity shall give at least 11 days advance intimation (excluding date of notice and date of meeting) to the stock exchange with regard to –
1) Alteration in form or nature of securities listed on stock exchange, or rights and privileges of holders; 2) Alteration in date on which interest on debentures or bonds, or redemption of redeemable shares, debentures or bonds, shall be payable. |
11.
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Submission of shareholding pattern
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Regulation 31(1)
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The listed entity shall submit to stock exchange a statement on shareholding of the securities as per following guidelines –
1. In 1 day prior to listing of securities on stock exchange.;
2. In 21 days from the end of quarter;
3. In 10 days of capital restructuring resulting in change exceeding 2% of total paid up capital.
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12.
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Shareholding of Promoter and group
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Regulation 31(2)
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100% holding of promoter and promoter group shall be in dematerialized form, and must be maintained continuously.
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13.
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Statement of deviation or variation
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Regulation 32
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1. The listed enetity shall disclose quarterly, with regard to any deviation related in use of proceeds in public issue, rights issue, preferential issue,
2. Such statement shall be given till the time the proceeds have been fully utilized or the proposal for which the issue was raised is achieved.
3. The statement shall be submitted before the audit committee for review which shall be then submitted to the stock exchange.
4. The variation in the issue shall also be specified in the Board Report.
5. In case the company has appointed a monitoring agency, it shall then submit to the stock exchange the comments received from the agency, if any.
6. The report of the monitoring agency shall also be placed in the audit committee on annual basis.
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14.
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Preparation of Financial Results
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Regulation 33
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1) It shall be on accrual basis as per the accounting standards.
2) The quarterly and year to date financial results shall be prepared as per principles laid down in AS25 or AS31, as applicable, specified as per Section 133 of Companies Act, 2013 or ICAI.
3) The standalone and consolidated financial statements shall be prepared as per GAAP.
4) In addition to the above, the listed entity can also submit the same as per IFRS notified by Indian Accounting Standards Board.
5) The auditor shall also give a Limited Review Report on quarterly or annual basis, which shall be placed before the Board which approves the financial results, before being submitted to the stock exchange.
6) Unaudited financial statements shall be accompanied by Limited Review Report, and audited financial statements shall be accompanied by Audit Report.
7) In case of PSUs, the Limited Review Report may be undertaken by any PCS.
8) It shall also make the disclosures as specified in Part A of Schedule IV.
9) The financial results shall be signed by Chairperson / MD / WTD, or in absence of all of them, it shall be signed by any other director duly authorized by the board to sign the financial results.
10) The standalone financial results shall be submitted within 45 days from the end of relevant quarter, other than the last quarter, which shall be submitted within 60 days from the end of financial year.
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Other regulations applicable on listed entities as per the
Listing Obligations and Disclosure Requirement Regulations, 2015 will be
continued in the next blog.
References:
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015
Contact:
CS Divyanshu Bansal
Email ID: divyanshubansal401@gmail.com
Nicely Drafted Bro
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